Facing headwinds, Wyoming coal industry ‘cautiously optimistic’ about Trump administration

Despite lackluster results from Donald Trump’s promise to “save coal” during his first presidential term, coal proponents are hopeful his second term will provide more of a reprieve — if not from opposing market forces, at least from the Biden administration’s “hostile” approach, according to one analyst.

“You can’t sugar coat it: Coal is facing some significant challenges,” Washington D.C.-based Bracewell partner and energy policy analyst Frank Maisano told WyoFile recently. “But [coal proponents] certainly are going to have a better time of it with this administration, who is not openly hostile to them.”

Those less-than-friendly coal policies include the U.S. Environmental Protection Agency’s power plant rules requiring utilities to cut 90% of planet-warming carbon dioxide emissions from existing coal plants by 2032, and the Bureau of Land Management’s decision to end federal coal leasing in the prolific Powder River Basin. 

Gov. Mark Gordon filed suit against the BLM on Thursday seeking to overturn the coal leasing ban.

While Biden administration officials have said both policies set compliance schedules around existing coal market trends, Maisano described the moves as “trying to spike the football on an industry that was already struggling.

“The previous administration’s focus was a whole-of-government approach on climate change,” Maisano said. “This administration’s whole-of-government approach is energy dominance.”

Gordon, who has described Biden’s coal policies as an “onslaught of anti-coal regulations” and has launched multiple lawsuits seeking to overturn them, praised Trump’s nomination of North Dakota Gov. Doug Burgum to lead the Department of Interior, which plays an outsized role in Wyoming’s fossil fuel industries.

“Since almost half of Wyoming’s surface land and 67% of its mineral resources are managed by the federal government, the Secretary of the Interior is integral to Wyoming’s economic well-being and future. It is good that we have a friend in that office,” Gordon said in a prepared statement following Burgum’s nomination.

But whether Biden’s “anti-coal” policies, and myriad other climate and fossil-fuel measures over the past four years, can be undone — either administratively or in court — and how fast, remains to be seen, according to Maisano and other energy policy watchers. Meantime, Wyoming coal proponents are hopeful there’s still an opportunity to extend the life of an industry that has served as an economic bulwark for the state for the past 50 years.

Unwinding policies

First on the coal industry’s agenda is to force the repeal of the EPA’s power plant rules and the BLM’s federal leasing ban in the Powder River Basin. 

Though Wyoming and other pro-coal states seek to do so through the courts, the path of litigation — even with favorable rulings — is uncertain and slow: It can take years to “unwind” administrative policies that have undergone the federal rulemaking process, according to Mark Squillace, a professor of law at the University of Colorado, Boulder. It’s one reason the BLM made sure to sign the Powder River Basin coal leasing ban in November hoping to finalize it before Trump takes office.

The quicker and more thorough way to repeal the rules — and bypass public input — is via Congressional Review, which requires a majority vote in both the House and the Senate. Assuming Trump would sign off on such an action, “then [the rules are] blocked and you can’t really promulgate anything similar,” Squillace said. But even with slight Republican majorities in the House and Senate, it may still be a longshot.

Overturning the rules via Congressional Review “would be their strongest way to go, because it wouldn’t be subject to a judicial challenge in any significant way,” Squillace said. “But, you know, it’s going to be a close call.”

On the litigation front, the challenge to EPA’s power plant rule may drag on because the U.S. Supreme Court in October declined to take up a petition calling for an emergency stay on the rule. 

Meanwhile, proponents of Biden policies that pinch coal and seek to address climate change note that electric utilities — although they are fighting the rules in court — have already begun the processes of preparing to meet the EPA’s greenhouse gas emission reduction targets by either retiring coal-burning units or running them at lower outputs. That’s the case for Rocky Mountain Power, which has converted several coal units in Wyoming to natural gas, citing ever-increasing costs of operating the aging facilities.

Even if the federal power plant rules are repealed, utilities still must meet emission reduction targets imposed by states.

Regarding the coal leasing ban, coal companies have not nominated a major new federal coal lease in the Powder River Basin in more than 10 years. Even if there is a ban, the industry still holds enough federal leases in the Powder River Basin to mine at current rates through 2041. 

“There’s still plenty of capacity with the existing leases, so it’s not like the moratorium is going to shut down mining anytime soon,” Squillace said.

That leaves much of the coal industry’s fate to the markets where Trump had little success bending it toward the industry’s favor during his first term.

Coal under Trump, round one

The coal industry was already in the doldrums when Trump first took office just months after massive mine layoffs in Wyoming. A series of coal mine bankruptcies, and more layoffs, continued throughout his term, wreaking havoc on coal communities in Wyoming and Appalachia, including unpaid debts to local governments.

By the end of his term in the White House, many, even in coal country, said Trump had failed to live up to his promise to save the industry.

One particular disappointment for the industry in Wyoming was the Trump administration’s failure to weigh in on a lawsuit against the state of Washington for blocking the Millennium Bulk Terminal, which Powder River Basin coal producers in Wyoming and Montana pinned hopes on to access overseas markets. The U.S. Supreme Court, in the first months of the Biden administration, declined to take up the matter, and the coal port project disappeared.

As a result, the Powder River Basin coal industry remains dependent almost entirely on the U.S. electric utility market, which has continued to retire coal units without replacing them. Wyoming coal production has shrunk by nearly half since its peak in 2008 while the industry continues to shed jobs in the state.

Simply put, “Wyoming coal production is driven by demand, not supply,” said Ronn Smith, a consulting engineer and member of the Sheridan-based landowner advocacy group Powder River Basin Resource Council. 

“Repealing [the power plant rule] isn’t going to change things,” Smith added. “Utilities want predictability as much as they want breaks from the government and to not get jerked around every four years. Their planning horizon is so much longer than the election cycle.”

‘Cautiously optimistic’

Coal proponents, however, still hold out hope.

“We’re cautiously optimistic,” Wyoming Mining Association Executive Director Travis Deti told WyoFile. “We’ve been down this road before with the Trump administration.

“I don’t think we can expect a 180-degree turnaround,” Deti continued. “But I think we can expect a federal administration that’s a little bit easier to work with and agencies that are, you know, not actively trying to kill our industry.”

Aside from turning back the coal leasing ban and the power plant rule, industry officials hope the incoming administration will help open coal ports and with them access to overseas markets, Deti said. The federal Office of Surface Mining Reclamation and Enforcement, according to Deti, has delayed some key coal lease expansions at existing mines, and he expects those to finally move forward under Trump.

Leaders in Gillette — the epicenter of the Powder River Basin coal industry — say that while residents there are hopeful for what a second Trump administration might do to help maintain coal jobs, there’s also a sense that it’s up to Wyoming’s congressional delegation to influence the administration to take meaningful actions.

“We can advocate and educate,” Gillette Mayor Shay Lundvall told WyoFile. “But [Wyoming’s delegation] is going to have to really try to fight it out for Wyoming and for Gillette.”

Meantime, a handful of market indicators may play in coal’s favor in coming years, according to coal industry officials. Electrical grid managers are increasingly concerned about power reliability, citing aging infrastructure and the intermittent nature of solar and wind energy being added to the system. Keeping coal plants online, they say, will help ensure power is available when needed.

Electrical power producers are also in a panic about how to meet unprecedented demand for electricity across the globe, driven by technology, data centers and artificial intelligence — an appetite that some industry officials say might slow the pace of coal plant retirements and buoy demand for Wyoming coal.

That’s why, according to Deti, it’s vital to overturn Biden-era policies such as the coal leasing ban and power plant rule.

“I think there’s some opportunities [under the incoming Trump administration], and we’re just going to have to wait and see how things pan out,” Deti said.

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